Nationwide announces mortgage lending changes

Nationwide Building Society has announced that it will only lend to mortgage borrowers with a deposit of at least a 15%, scrapping its deal for those with 10% of the property’s value amid concerns about falling house prices in the wake of the coronavirus crisis.

Nationwide, which before the pandemic offered loans where a deposit of just 5% was needed, said the change, which is due to ‘unprecedented times and an uncertain mortgage market’, is ‘prudent’. It added that the 85% loan-to-value (LTV) ceiling will help protect borrowers from potentially slipping into negative equity. It also noted that the existing mortgage customers will still be able to obtain loans at up to 95% LTV.

Henry Jordan, Director of Mortgages at Nationwide Building Society, said “The outlook for the mortgage market and house prices remains uncertain. As a responsible lender we must factor this uncertainty into our lending assessments, which is why we have taken the decision to reduce our maximum LTV for new business.”

“Our priority at this time must be to help members keep their homes. As such, we need to ensure our members can afford their repayments, while doing what we can to protect them from falling into negative equity.

“We will continue to keep this situation under review and hope to return to lending at higher LTVs in the near future.”